Currently, monetary accounts including debit accounts and credit accounts have only rudimentary controls on spending. In many cases, the only control is the remaining monetary value for the account. So long as a given purchase does not exceed the remaining monetary value, the purchase can be approved regardless of what the good or service happens to be. In some instances, corporate accounts have a per transaction monetary value limit on non-travel items. While debit and credit accounts are useful forms of payment, the lack of control reduces their applicability for controlling discretionary spending and ensuring that adequate funds exist to cover non-discretionary purchases.
Pre-paid accounts may be used for a single dimension of control for purchases. For example, a prepaid account may be associated with one specific store or with one specific type of good or service. Thus, the pre-paid account provides control for the funds in the account in that the funds may only be used at the particular store or only for the particular good or service. However, using a pre-paid card is ineffective for controlling non-discretionary spending for various reasons. For example, where the pre-paid card is associated with one specific store, there is no control over what is purchased within that store and purchases by the individual using the account may need to occur at other stores. Where the pre-paid card is associated with one specific good or service, the individual using the pre-paid account will need to make purchases for many other goods or services such that it is impractical to have a pre-paid card for every possible good or service that may be needed.
Typical examples of situations where discretionary spending needs control includes expenditures of college students, of business persons, and individuals without the capacity to otherwise manage their discretionary spending. In each of these cases, there may be a given amount of funds allotted per period to the account to cover both non-discretionary and discretionary spending and control is needed to ensure the discretionary spending does not overtake funds needed for the non-discretionary purchases.